1. 57

The salaries on levels.fyi are really striking, especially to non developers. I mean that’s Dr/Lawyer pay. I’ve read a lot of theories, everyone has an opinion it seems. Some cite supply and demand, some cite the difficulty in finding “good” developers, and the good/bad evens out at high salaries. Why do you think developer salaries are so high?

  1.  

  2. 66

    There are a few key factors I think that come into play. I should note that I only have direct experience with the US market (although I know many people who do or have worked in other parts of the world).

    The first thing I think is to point out that levels.fyi and other sites that focus on salaries at FAANG/tier 1 companies greatly distort the perception of the market. Most developers don’t make anything near the total comp that you see at those companies. Even folks with comparable base salaries aren’t making nearly the amount in equity, even out on the west coast.

    Those salaries are also often for jobs that are clustered in the most expensive parts of the country. For folks living outside of the Bay Area, salaries are much lower in general. The discrepancy in cost of living is astounding.

    Equity is another big part of it. Equity isn’t normal money. Even at large public companies where you can easily sell your shares, the accounting is different. You have to wait for those shares to vest, and you can only sell them at certain times, you don’t know the exact value your getting when you accept a job with an equity component. From the companies perspective issuing equity doesn’t have the same cost as issuing cash, and most people will never actually get all of their equity in reality (they will leave with some equity unvested for example).

    Even with all of that, you might wonder why salaries are so high. Supply and demand is a big part of that. If you look at the trend of companies investing in boot camps and other training programs it’s obvious that they see increasing supply of developers as a strategic way of lowering salaries. In particular I’ve noticed that the salaries for some very common sorts of web development have plummeted over the last 5 years as hoards of bootcampers who’ve been trained in those very specific skills (but intentionally not given the skills to be mobile in the industry or get better jobs) have entered the market and started turning that part of the development field more blue collar.

    Related to supply and demand, I think one strategy that has been inflating developers salaries is that some large companies are hiring everyone they can to starve the market of talent. A lot of developers are paid a lot of money just to prevent them from starting up a competing company, or going to work for a competitor. The laws in California against non-competed has probably helped this some, but even if you can prevent your employees from doing exactly the same work they have been doing, there’s a lot of strategic value in depriving your competitors of talent.

    The last factor I think is the immaturity of the industry. As time goes on and the industry matures, we are going to see salaries for developers depressed and more compensation going to investors and executives (this has already happened with startup equity. Nobody gets rich from being an early employee anymore because VCs have sucked the marrow from that bone already). I personally think a well organized union for software developers to represent our interests is the only way to stop the complete commoditization of our jobs over the next decade, but for it to be effective we’d have to do it now- and the strong undercurrent of right leaning and libertarian leaning culture in tech is likely to prevent that kind of organizing before it’s far too late to be effective.

    1. 14

      If you want accurate statistics about pay for different jobs in the US, the Bureau of Labor Statistics provides very good ones: https://www.bls.gov/oes/current/oes_nat.htm I think it would be a good idea to use these numbers rather than the ones from levels.fyi

      1. 2

        I’d never heard of this website before, so I suppose this post was good advertisement for it. I’m especially intrigued by the $2.5M salaries at Microsoft. I agree with your statement. A good place for actual numbers is also the H1B database, say https://h1bdata.info/index.php.

        1. 1

          Very true those numbers are more representitive of reality, BUT even my state/metro, I know many developers who are way above the median for the area. I am myself. Of course that’s why it’s a ‘median’ but on the ground pay can be substantially higher than those numbers indicate.

        2. 12

          I think one strategy that has been inflating developers salaries is that some large companies are hiring everyone they can to starve the market of talent.

          This is a hard claim to swallow. It requires that very few companies have so much market share that they can overpay developers, and make it up by monopolizing their niches.

          Maybe this is true of specialized niches, perhaps subfields of machine learning or search, where there are three or fewer companies operating at massive scale. But for “generic” web/application/systems/distributed systems/ programmers[0], you have at least Apple, Amazon, Microsoft, Google, Facebook, and “everybody else” competing for talent. Even if you very generously suppose that “everyone else” only is as big as one of those five, that gives you six players.

          So with 6+ players, I think that’s too many for a stable overpaying strategy to be going on–someone would start cutting salaries and would save lots of money.

          [0] I’m “generic”, so don’t take that as a criticism.

          1. 4

            They don’t want all the talent as in every developer. She might have meant all the best hires, such as top universities. They’re flooding toward FAANG for the big bucks and prestige.

            1. 1

              I was talking about the top of the market, hence my references to GAMFA.

              They’re a significant minority of overall hiring, but probably a much larger chunk of the very high salaries.

          2. 7

            Overall I think that’s a good summary, but it’s missing possibly the most important aspect: the revenue per employee of the top companies is unprecedented. It’s worth paying someone $500k/yr when they’re making you $1m/yr.

            I personally think a well organized union for software developers to represent our interests is the only way to stop the complete commoditization of our jobs over the next decade

            I’m not sure how unionization would help. Unions I have been involved with (mostly federal government) are as, or more, guilty of treating people as replaceable cogs in the machine than “management”. In their drive to push for equal treatment, they often end up pushing the fallacy of equal ability. I’ve had discussions with union reps who were literally saying “an employee at pay level X should be able to do the job of any other employee at pay level X”, completely disregarding specialist fields, let alone actual skill.

            What will stop the (complete) commoditization of software dev is quality. I’m yet to see “commodity dev shops” (including most big name consultancies, TBH) deliver products that are fit for use or maintainable.

            1. 15

              Profit per employee isn’t unimportant, but I see it more as something that enables the other factors, rather than a cause in and of itself. Absent the other factors that are driving salaries up, I think more companies would prefer to have a larger profit margin rather than pass that money on to developers. It’s also very hard to know how much profit actual developers are generating in a large company. Even when the story is ostensibly clear (I made code change X that brought our AWS spend down from 100k/month to 50k/month) the complexities of the business make direct attribution fizzy at best.

              Regarding unions- I think that people tend to look at the most degenerate cases of union behavior and use that to explain why we don’t need one, without considering what a union that was organized specifically for tech workers could bring. Groups like the Screen Actors Guild might be a better starting place than something like a teachers union, because it has to scale across a much broader range of talent and demand. Personally I’d love to be part of collective bargaining for better terms for equity offered by early stage startups (like a longer exercise window), or an organization that helps create guidelines so that “unlimited vacation” doesn’t effectively because “no vacation”. Tech workers are doing good right now and I don’t want to make it sound like things are terrible- but the best time to organize and collectively bargain is when you have leverage.

              1. 3

                I think more companies would prefer to have a larger profit margin rather than pass that money on to developers.

                Of course, that’s where competition comes into it. But fundamentally, without high revenue per employee, none of the other factors come into play.

                I think that people tend to look at the most degenerate cases of union behavior and use that to explain why we don’t need one

                I’m open the the idea that there are possibly good, useful unions. They’re just not something I’ve seen in the real world. The main union I have experience with represents 10s of thousands of skilled workers across many disciplines and still struggles to be, in my estimation, a net positive.

                The collectivist nature of unions means that they often act too much in the interest of the collective, regardless of what that means for individuals. That can translate into being more concerned with maintaining their power base than necessarily improving member outcomes (though you’d hope those two things would be at least partly aligned).

                1. 4

                  It’s also very hard to know how much profit actual developers are generating in a large company.

                  And irrelevant. Companies don’t pay what people are worth, they pay the minimum they believe they can while keeping the person on staff and productive. It is all about the competitive marketplace and individual skill (both in the trade and in negotiation).

                  Right now, it is easy to leave a company for a large salary boost, so to retain people you have to pay them enough to make taking the risk of leaving not worth it – that is all.

                  1. 1

                    It is all about the competitive marketplace and individual skill (both in the trade and in negotiation).

                    It is for the low-level, production workers. The executives get routinely overpaid with all kinds of special deals and protections. I think either they should be forced to compete in a race to the bottom like the rest of us (free market) or we get protectionism and/or profit sharing, too.

                  2. 1

                    It’s also very hard to know how much profit actual developers are generating in a large company.

                    Divide the total profit by the number of employees.

                    This isn’t a perfect solution, but it gets you pretty close.

                2. 4

                  Thanks for the detailed answer. I am not that knowledgeable about the job market being a junior CS student myself, but the point about bootcamps intentionally not teaching the skills to be mobile and get better jobs caught my attention. I am aware that learning ‘basic web development’ is perhaps the fastest way into the job market, so most bootcamps focus on that, but what are those other skills you mentioned that bootcamps should be teaching but aren’t?

                  1. 4

                    but what are those other skills you mentioned that bootcamps should be teaching but aren’t?

                    Mostly; math, algebra’s, algorithms, data structures, complexity theory, analysis, logic, set theory, consultancy skills, scientific methods and everything that allows you to build better software and frameworks than there are currently out there. You need some hardcore coding skills and formal skills to build something better than what’s already out there, but it’s totally doable with the right education, because most of the industry is just selling “hot air”. Basically: You should be able to read and understand the four volumes of “The art of computer programming” without to much trouble. If you can do that, you’re there.

                    That being said: It’s more about you picking your educators carefully, than it is about getting a degree. You’d still need that degree, but where it comes from is way more important.

                  2. 2

                    I can’t upvote this enough! Great explanation.

                    1. 1

                      In particular I’ve noticed that the salaries for some very common sorts of web development have plummeted over the last 5 years as hoards of bootcampers who’ve been trained in those very specific skills (but intentionally not given the skills to be mobile in the industry or get better jobs) have entered the market and started turning that part of the development field more blue collar.

                      One consideration with web development is that the amount of money you can make scales with development speed much more than total cost-per-project/website made.

                      Small/local business websites generally go for somewhere in the range of $1k to $3k, but the difference in development speed to get those sites live is massive between developers. There are developers in India et., al. that will take 150 hours to complete a semi-custom WordPress site (which would be around $10 per hour) and there are developers that can build the same site at the same level of quality in 15 hours (which would be $100 per hour).

                      Also, accessibility to CMS tools, plugins, and so on is another reason why that type of work has become more blue-collar-y. You can make very solid small-business type websites with little-to-no programming experience in Current Year.

                      This is from a contract-based/freelancer point-of-view. It’s possible that the scenario is different in the corporate/employee-basis web development world.

                    2. 17

                      I’ve been a hiring manager / engineering director in San Francisco for a number of years and I’ve talked a lot with people who’s job it is to set engineering compensation.

                      This is mostly my own speculating and reasoning it out. So sorry, won’t be citing any sources.

                      Much of what you’re seeing is really the top companies, especially FAANG and those trying to compete with them for engineers. This is especially true in the Bay Area where there are a lot of engineers, but still a limited number that live there or are willing to relocate. The housing costs are a big deterrent to relocating. Everyone is hiring.

                      There is another tier of companies that doesn’t pay as well as these.

                      In those top companies, they generally have to recruit engineers from other companies, and candidates often have multiple offers. They index their compensation against each other. So it’s a bit of an arms race. If another company is willing to pay your engineers more, you need to match it or risk losing them.

                      Generally it’s a labor shortage, combined with easy Venture Capital, but also a set of businesses that have or have potential for great profit and revenue with high margins.

                      One thing we’re seeing is a push to hire remote engineers, elsewhere in the US or even outside of the US. I think this is because we’ve finally run compensation up to a level that is hard for businesses to bear. And everyone uses video conferencing and things like Slack now.

                      Generally for more senior engineers in the US, they can demand Bay Area compensation even when remote. More junior are going to take a hair cut on Bay Area compensation.

                      1. 16

                        I’m talking with a friend of mine right now who is moving from Google in SV at ~$250k USD to Google Montreal at ~$230k CAD (~$170k USD). (Total comp with stock/bonus)

                        While $250k USD in SV is great, you’re still living in an overpriced rental, you just feel mid-upper class. But $230k CAD in Montreal though is completely different. You’re basically “the 1%”, you can buy what ever place you want, you can go to the fanciest restaurants often, etc.

                        My friend is going from a rather miserable place he hates, to his home city and while he took a comparable pay cut, he’s gaining a much better QOL and Google just saved $60-70k USD on a single employee.

                        The real question ends up being where you want to end up in the long run. I was in a similar boat making ~$170k CAD ($130k USD) (base pay, no bonus/comp) working remote from Toronto, which was awesome a comparable position locally would have got me around $120k CAD. I had an amazing downtown penthouse condo, my QOL was generally great. But I wasn’t going to live in Toronto forever, my partner lives in the US, and we’ll likely end up in the US for at least the next 5-30 years. My $170k CAD salary was a huge hindrance if we were wanting to buy a place in one of our choice cities: Seattle, Boston, DC, NYC, etc. All of which are more expensive than Toronto. I’m in Seattle now and while I comparably make a lot more my QOL dropped a fair bit, I now live on the 2nd floor of a ~6 story rental building, paying the same percentage of my income towards rent as I was for my Toronto penthouse. (So really a lot more than I was paying for my Toronto place.) But if I were to return to Toronto I’d just straight up have more cash.

                        The trade offs are interesting.

                        1. 1

                          My friend is going from a rather miserable place he hates, to his home city and while he took a comparable pay cut, he’s gaining a much better QOL and Google just saved $60-70k USD on a single employee.

                          Glad to hear that your friend is choosing their own happiness over money, even if it worked out with QOL. Also glad to hear that someone aside from myself detested SV—most people there make fun of everywhere that’s not California. I’m extremely happy I don’t live there anymore.

                          I’m in Seattle now and while I comparably make a lot more my QOL dropped a fair bit

                          Interesting to hear that Seattle is more expensive than Toronto! That goes against what I assumed. I’m actually in the inverse boat—due to circumstances surrounding my partner we’ll likely end up moving from Seattle to Canada in the next few years. I love the PNW, but Vancouver seems even worse than Seattle at this point QOL-wise.

                          1. 2

                            Also glad to hear that someone aside from myself detested SV—most people there make fun of everywhere that’s not California. I’m extremely happy I don’t live there anymore.

                            I didn’t realize how little I liked the Bay Area until I moved to Toronto. Obviously, there’s a lot of California that I miss, but it’s really nice to not hate my working life any longer.

                      2. 15

                        My perspective as a US programmer who deliberately isn’t part of the west coast market: It’s an investment bubble.

                        VC’s have put an enormous amount of money into tech in the last 20ish years, and created a very self-centered, hype-driven culture around it that has actually been pretty financially successful so far and so self-perpetuates. Those VC’s want their money back, but the big companies (FAANG I guess, though that’s a new acronym to me) make an absolutely absurd amount of money, so even a moderate success can pay the VC’s back if they get bought by one of the big bois. These companies are all centered around San Francisco and Seattle, and pay their people a lot of money, and that distorts the already-unhealthy markets for housing and everything else in the area and requires them to pay their people even more money. That drags the salaries elsewhere up ’cause people have to compete against Google or the programmers will just move to San Francisco.

                        This can’t go on forever, and can make life real hard for the second-tier companies that are big but not as successful, such as Uber and Tesla. They’ve spent money like they’re Google but don’t have much to show for it, and the investors are going to want a payout sooner rather than later. At some point they’re going to decide it’s not coming and big but vulnerable companies are going to start folding. Whether it all pops at once or is more of a slow deflation, I dunno, and I’m surprised it hasn’t happened yet; I guess it’s a testament to the immense amount of cash FAANG can dump into the system.

                        This deflation is already happening in the US biotech industry, where VC’s and large companies have dumped probably trillions of dollars into drug research… which mostly hasn’t paid off. You get a company with maybe some decent products but no new Viagra, is only marginally profitable if at all, and has a lot of investors who are looking for their 10x payout. So the investors put someone new in charge who promises to turn the company around and make it profitable again, and that’s how you get crooks in charge who jack up the price of epipens by 10x, ’cause the investors want to believe the promises that these con-men provide.

                        Edit: Also see the comments in the guy’s biotech salary survey. You see a similar GIANT SKEW between people in the UK, where mid-career people make £35k, and people in the US in the Boston area and the west coast, where an entry-level position is $95k.

                        1. 11

                          I respectfully disagree.

                          FAANG companies are not like Uber / Tesla / Lyft … who rely on VC to drive innovation. They are a league of their own. They are financially secured enough to spear head the tech market thus they crave for talents (and the innovation to come with it).

                          Historically, this could be seen with IBM, with Microsoft… It’s just that the growth speed of FAANG is a LOT faster due to being in the Internet age and open information sharing. This leads to harsher competition and thus drive up the tech wage even more.

                          Yes, FAANG cannot go on ‘forever’. But they have set themselves into position that will last decades if not hundred of years down the line (again, look at how IBM and Oracle still exists today). And that is only counting the financial security of these companies, the human capital, the culture that FAANG set out should last them even further.

                          Personally I can only see the only competitions to FAANG (in term of financial security) are the Chinese big 3: Baidu, Alibaba and Tencent. And even those 3 are racing to steal talents back from the western companies with ludicrous number

                          1. 2

                            Yeah, I’m definitely a bit out of my depth in things at that level. And it might not have been clear but I was considering Facebook, Amazon and Google at least to be more on the venture side: sources of money that fuel the bubble, both in terms of paying employees and in terms of buying up successful companies if not funding them directly.

                            But bursting bubbles kill big, financially secure companies. That’s part of what makes them so damaging. Why would it be impossible for the same to happen to big tech companies?

                            1. 3

                              Why would it be impossible for the same to happen to big tech companies?

                              1. Because they do foresee it. FAANG or Chinese big 3 have good culture of self-reflection and understand their strengths, weaknesses and their brand. They are smart enough to set themselves onto a self-corrected course. And unlike traditional companies, these guys are fast and agile enough to change and adapt

                              2. They have HUGE cash reserved. Most of these firms have GIGANTIC resources that could last them for years if not decades. You can go to sec website and checkout Alibaba or Amazon filing to find out more. To give a rough idea: China vs US trade world caused most tech and startups in China to cut down on jobs, but Alibaba decided to increase hiring thanks to the huge capital they have saved up in case of crisis.

                          2. 3

                            FAANG stands for Facebook Apple Amazon Netflix(sic!) and Google.

                            1. 1

                              Yeah Netflix was kind of the odd one out that took a while to figure out.

                              1. 3

                                2 decades ago it would have been Netscape… ah, the memories.

                                1. 2

                                  It’s in there not because of its size or the amount of money it makes but because it attracts the same kind of talent (for roughly the same price) as the rest of them. They also have the same kinds of “web-scale” (no pun intended) problems as the others. I think it would be fair to include Microsoft in there nowadays, but when the acronym was coined they didn’t have a great image with potential employees.

                                  1. 1

                                    More letters, more options!

                                    • FANMAG - I quite like this one, a bit hipster-y
                                    • FAGNAM - “work it FAGNAM style!”
                                    • FNMAGA - “F*ck Netflix, Make Amazon(prime) Great Again!”
                                    • AGMFAN - “A GM fan” - lure in those old-school midwest engineers who like gears and oil
                            2. 12

                              This has nothing to do with tech, it happens everywhere in higher paid jobs when comparing the US to the EU. Everyone is giving you gut feel answers, but this is an economics question and has answers that we can back up with data.

                              The driving force for this is inequality. The inequality in the US is far larger than that in the EU. So people who have worse jobs have worse lives than in the EU and people who have really good jobs do far better. Just to put this in context. You’re in the top 1% of earners in France with $215k per year but you need $475k per year to be in the top 1% in the US.

                              You can also see this from another angle. You say that devs are paid doctor or lawyer salaries in the US compared to the EU. But those are EU doctors and lawyers. In the US they also make far more.

                              Another, but much smaller contributor to this, is that the average salary in the US is 30% higher than the richer EU countries.

                              1. 4

                                You can see this across almost all scales in almost all fields, too. As a professor in Denmark, I made significantly less than most American professors—but our PhD students and non-academic staff made significantly more than most American equivalents. In the US you often have 5x or more ratios between different levels, e.g.: cafeteria worker makes $20k, PhD student makes $25k, prof makes $100k, senior administrator makes $500k. In Denmark, it’s more often 0.5x than 5x, something like: cafeteria worker makes $40k, PhD student makes $55k, prof makes $70k, senior administrator makes $100k. By American standards, some of these salaries are low and some are high.

                                1. 2

                                  The driving force for this is inequality. The inequality in the US is far larger than that in the EU.

                                  It also has to do with global inequality.

                                  1. 1

                                    I was investigating software engineering jobs in the EU about 1-2 years ago; this was roughly the conclusion I came to. The EU has less inequality and, usually, better social benefits. While I like being paid US salaries, I can’t help but think the EU is generally a healthier place on most axes.

                                  2. 7

                                    Better question is why they are so low in Europe…

                                    1. 5

                                      Depends on the places. In most tech hubs they easily start at 2-3 times the average salary and they get as highas 4-5 times in places like Zurich. after taxes. With european standards of welfare. That means a disposable income sensibly higher than the general population.

                                      The real question should be: why is society paying so much for a bunch of kids building stuff that most of the times doesn’t have any social value, but we already know the answer.

                                      1. 9

                                        The real question should be: why is society paying so much for a bunch of kids building stuff that most of the times doesn’t have any social value,

                                        It’s not. Most developers aren’t in SV building useless stuff, they’re working for government and businesses, and getting paid because they save/make their employer money.

                                        1. 3

                                          that’s very different from producing social value. Just because you make money from somebody doesn’t mean you’re doing much for society. Some people in some countries believe market value and social value are somehow connected but it’s a somewhat old-fashioned cultural artifact it’s time to get rid of.

                                          1. 1

                                            Just because you make money from somebody doesn’t mean you’re doing much for society.

                                            Well, it’s an indication that you’re providing value to someone. It’s then up to you as an individual to add a moral assessment of the value of the overall enterprise.

                                            Some people in some countries believe market value and social value are somehow connected but it’s a somewhat old-fashioned cultural artifact it’s time to get rid of.

                                            They certainly somehow connected, though imperfectly.

                                        2. 2

                                          why is society paying so much for a bunch of kids building stuff that most of the times doesn’t have any social value

                                          And doesn’t even work well (e.g. I am unable to paste text in Facebook messenger; the entire thing loses it shit if I paste with either middle mouse or C-v).

                                          1. 1

                                            I mean, even more so for software, which never works.

                                          2. 1

                                            I think because social welfare states cost money? Taxation is higher in Europe (for individuals and companies) and we don’t have a billionaire class lobbying for constant cuts. There are tax havens (Luxembourg, Ireland, etc.) but those are mostly for multi-nationals and not SMBs and the like. There’s also higher labor protection over here.

                                            I don’t think the EU will ever make more money than the US. And I sure hope it stays that way.

                                          3. 6

                                            I have a simple (so probably incorrect) hypothesis: the main business of modern companies is inflating their stock price → which is represented by “growth” → which in tech companies is synonymous with hiring more souls → bingo!

                                            As for why they’re even having an interview process in place, it is to maintain a semblance of being selective so there’s the impression that only best people get hired. That this is but a smokescreen should be obvious to anyone who ever worked or even just taken a few interviews in big 5 — this is an increasingly random game.

                                            1. 6

                                              Culture. It’s the same reason that food is better in France.

                                              I’ve heard it stated that Heaven is an American salary, Chinese food, an English house, and a Russian wife. Of course, the corollary Hell is a Russian salary, a Chinese house, English food, and an American wife.

                                              1. 4

                                                English mansion, maybe, but sure as hell not regular English housing. I feel like most housing here is miserable.

                                                1. 1

                                                  Interesting, thanks for the perspective. Maybe the adage needs to be updated.

                                                  s/house/healthcare/g
                                                  
                                                  1. 2

                                                    Nah you definitely don’t want that.

                                              2. 5

                                                I think the issue is that SV is driving a certain level of pay. But as remote work becomes more and more accepted companies outside of SV are having to compete at wages that are close to SV prices. I live in a medium sized urban American city and our tech wages used to be some of the lowest in the country. Like 40-50k a year. Due to the acceptance of remote work I was able to force a local company to pay me a wage in the mid six figures because I could point to remote wages and say I can get a remote job making x living here why would I work for you for less? So now I’m in the top 0.5% of my states wages because I used the remote market to drive a much higher wage.

                                                1. 2

                                                  I’m a little surprised that the Silicon Valley companies are offering the same or similar (Is this what you’re implying?) wages for remote work as on-site: I would expect them to offer a lower wage on the basis that you don’t need to cover the cost of living in Silicon Valley (while still offering a little more than any company local to you).

                                                  1. 2

                                                    The wage they offer you is based on what you can convince them you are worth to someone. If you’re a senior engineer and want to work remote, get multiple offers, find a company willing to pay Bay Area compensation for remote work. The other companies then have to compete with that.

                                                    I know of several remote engineers who have that arrangement.

                                                    1. 1

                                                      I’ve seen a few friends get offers in the mid to upper 100k’s from SV companies. I was first offered below 100k at my current job and the pressure of those remote salaries allowed me to push for a significantly higher rate then they would have offered me otherwise.

                                                  2. 8

                                                    I don’t think there’s anything in this that can’t be explained by strong competition and extreme economies of scale.

                                                    Competition: It’s just that so many places need developers these days, yet the earnings you see are probably not the random crappy app creation startup, but the large corps. They pay because they want the best developers.

                                                    Economies of scale: This is I think really unique in software and other nonmaterial/digital goods (which also explains high salaries for popstars, actors etc.). If Amazon develops a new feature it doesn’t really matter a lot in developer costs and time whether they sell it 10 times or 10 million times. But if they sell it 10 million times the cost of the developer become quite insignificant.

                                                    1. 4

                                                      I observe the opposite: why are developer salaries so low? When you look at the value a developer brings to a profitable project, it is not uncommon for there to be an order of magnitude difference between the productivity of people/teams.

                                                      Either way, we need better ways of measuring productivity and its correlation with profits. If you bring five times the value, the pay ought to be five times as much.

                                                      1. 3

                                                        This feels a bit like the project management paradox. Often a PM doesn’t really contribute to the deliverable directly, but as they are often the bridge between developers and senior stakeholders, stakeholders tend to attribute success stories to the project manager rather than the individual developers. It’s usually about “perceived value” rather than “real value”.

                                                      2. 3

                                                        Because there are a ton of succesful tech startups that are driving up wages… Starting salaries of ~100k for straight out of a 6 month training program are the new normal here.

                                                        1. 2

                                                          Where’s here, and how do I apply

                                                          1. 1

                                                            Boulder, Co, thierry at getstream dot io. (you need to be allowed to work in the US though.)

                                                        2. 3

                                                          Those salaries are not high when compared with the amount of wealth generated by software engineers, frequently working long hours and with little holiday. Other people get rich and the software engineers take home a fairly decent salary.

                                                          The real question is why are software engineers in other countries paid so much worse? My suspicion is that software is used less effectively, or perhaps that really effective revenue generating businesses are less common, creating less competition for software engineers.

                                                          1. 2

                                                            I would like to see salary distributions not only split out by country but also by “type of software development”. There’s a huge difference between web dev - Django/RoR/ETL sort of stuff - and, say, embedded software development, or HPC, or something.

                                                            At least in the UK, the salaries appear to be massively different… but I don’t know if my experience generalizes across the whole country (e.g. is it really a London versus elsewhere thing? And there happen to be many more webby startups in London?); let alone across other countries.

                                                            1. 2

                                                              I can’t cite any real data, but I think for better or for worse, engineers writing backend services for web things are going to demand better compensation than say an embedded engineer. The margins on SaaS are much higher than hardware / embedded, and there is a ton of demand.

                                                              Of course I’m talking FAANG, or companies trying to recruit from FAANG, vs say embedded engineering at Cisco or Juniper.

                                                              Glassdoor does have data on this.

                                                              1. 2

                                                                You seem to be right: at least, that fits with my experience. It surprised me though: I know demand for webby stuff is high but I thought supply would be even higher. When I worked in hardware/embedded/HPC-type things, it was really hard to find good candidates to hire. We’d interview loads of people before we offered anyone a job. Now that I work on web shit, there seems to be a huge pool of candidates to choose from.